Kept under seven keys. This is how the public financing contract signed in November 2020 between Air Europa and the State Company for Industrial Participations (SEPI) has been until now, which allowed the company to survive the worst crisis that air transport has ever endured, that of Covid-19. 19. The aid, for 475 million, was the first and largest granted by the Fund to Support the Solvency of Strategic Companies (FASEE), whose budget was 10,000 million to support companies in check due to the pandemic. The conditions were also the most demanding, in terms of guarantees, for the Globalia airline, according to documents to which EL PAÍS has had access. The company’s management asserts that “they never dealt with Begoña Gómez [esposa del presidente del Gobierno] the contract with the SEPI, nor was there any intermediation by Mrs. Gómez in that matter.”
Various digital media have linked President Pedro Sánchez’s partner with alleged favorable treatment to Air Europa to attract public support. This information, from headlines such as The Objective, The Confidential or Populi Voice, branded as false and inconsistent by members of the Executive, such as Óscar Puente, are the basis of the complaint by the pseudo-union Manos Cleans against Begoña Gómez for an alleged crime of influence peddling, presented on April 8 in the Court of Instruction number 41 of Madrid. Judge Juan Carlos Peinado decided to open proceedings on the 16th, and the President of the Government reacted by suspending his agenda last Wednesday. He gave himself five days to consider a possible resignation. In a public letter, Sánchez complained about “the unprecedented attacks by the right and the extreme right” against his wife. At the moment, the Prosecutor’s Office has requested the filing of the Manos Médicas complaint. After the earthquake, the president will reveal his decision this Monday.
Whether the lifeline to Air Europa was granted cleanly or not, both the report on the airline’s eligibility and the viability and guarantee plans were audited by Cuatrecasas, PwC and the State Attorney’s Office on behalf of the SEPI. Subsequently, they passed through the FASEE management council and were seen by the Council of Ministers. Before, and in the time frame of these negotiations, Begoña Gómez had contacts with Javier Hidalgo, then CEO of Globalia and son of the founder of Air Europa, due to her status as director of the IE Africa Center of the Instituto de Empresa. The executive’s version is that he sought Gómez’s support for projects from his tourism innovation firm Wakalua, for which he obtained a collaboration contract that was interrupted by the pandemic and was not subsequently reactivated. “The meetings were absolutely unrelated to any financing process for the company,” adds Air Europa.
The losses accumulated by Juan José Hidalgo’s airline in 2020 and 2021 amounted to 1,000 million, skyrocketing the debt with suppliers. The SEPI public credit was claimed on August 20, 2020 with an initial figure of 400 million; On October 8, the FASEE council requested a correction in the submitted request and, once resolved, the request went up to 475 million after a ruinous summer. The parties signed on November 11, 2020.
The 475 million public support was divided into 235 million ordinary credit and 240 million in a second participatory loan. Both have a return date of November 11, 2026. Having studied the assets of the Hidalgo family, owner of Air Europa, the SEPI demanded guarantees for the State for a value close to 1,000 million. Among them were hotels worth more than 400 million; the Air Europa headquarters in Pozuelo (Madrid) and Palma de Mallorca; the aircraft maintenance and airport ground services businesses, and even the sale agreement of Air Europa to IAG. On these loans, on November 11, 2023, the last annual interest payment was made, with 20 million euros, which totals 41.6 million since obtaining it.
Last year, the company requested a downward renegotiation of the deposited guarantees and pledges from the SEPI, without any success. In another fight with the Government, Globalia’s lawyers took to court the request for compensation for almost 900 million due to the damage caused to its hotel and transportation activity due to the first state of alarm decreed due to the health crisis. The lawsuits have been dismissed by the Supreme Court.
Last option
SEPI’s aid was granted as a last resort, so Globalia had to demonstrate that it had been impossible to raise financing through any other means. A month before receiving the money, the company had stopped paying its suppliers. For this reason, the contract gives a mandate regarding the destination of each euro. The manna went, for example, to aircraft lessors.
Those around Juan José Hidalgo and his son Javier explain that they had never signed such tough financing, but “the urgency was pressing.” The price was the same for all the companies rescued by SEPI, but not the volume of guarantees or intervention in management. For the ordinary credit (235 million) a fixed interest of 1.89% was set, while the participatory credit (240 million) started with a rate of Euribor plus 2.5%. The variable portion rose to 3.5% in the second year; It is at 5% in this third year, and will rise to 7% in 2025 and 2026. The contract includes a clause by which Air Europa will pay an additional 1% on the principal of the participatory credit, which represents an extra 2.4 million , at the end of 2023 in profits.
The Hidalgos had to accept the entry of the SEPI into the management, with an Air Europa board formed by Juan José Hidalgo and his daughter María José, on the part of the owners, while the SEPI appointed two representatives: Juan Manuel Bujía, former general director of Civil Aviation, and César Hernández, FASEE Area Director (he has just replaced José Ángel Partearroyo). The fifth chair is occupied by the former president of El Corte Inglés, Jesús Nuño de la Rosa, as CEO. With extensive experience in the tourism sector, this figure was agreed upon by Globalia and SEPI.
In addition to being intervened, many of the agreements that Air Europa has to bring to the general meeting of partners require the favorable vote of the SEPI to prosper. Highlights include merger agreements, capital reductions, modification of the corporate purpose or domicile, changes in the board, remuneration of directors, the sale of assets or the appointment of an auditor that is not one of the big four (Deloitte, PwC, EY and KPMG).
The vote of the SEPI is decisive in the council meetings for the approval of the annual budget if it grows by 20%; the hiring of personnel with more than 200,000 euros of annual salary; financing above 50 million; the sale of goods for more than 25% of the value of balance sheet assets; investments that exceed 25 million or the signing of collaboration agreements. Nothing escapes the SEPI microscope. Globalia, of course, had to obtain public approval to sell Air Europa to IAG, an operation under review by the EU Competition Directorate General.
Air Europa previously used the crutch of the Official Credit Institute (ICO) to raise 141 million in bank financing. The signing took place in April 2020 with Santander, Bankia, Bankinter, CaixaBank, Liberbank, Unicaja, Sabadell, Banco de Crédito Social Cooperativo and ICO itself. The latter guaranteed 80% of the loan, maturing in 2028 and for which an interest of 8% is paid. The company has returned 29.6 million in capital and has faced 24.6 million in interest.